fellow Posted November 21, 2023 Share Posted November 21, 2023 (edited) ‘Far too early’ to propose UK interest rate cuts, says Bank of England governor https://www.theguardian.com/business/2023/nov/20/uk-interest-rates-inflation-bank-of-england-governor-andrew-bailey Quote UK interest rates will need to stay high for some time despite the sharp fall in the annual inflation rate, the governor of the Bank of England has warned. Andrew Bailey used a speech in London on food prices to say there was more work to do to bring inflation back to its 2% target – and there remained a risk that borrowing costs might need to increase in the coming months. “Let me be very clear: it is far too early to be thinking about rate cuts,” Bailey said. Bailey said inflation remained well above its official 2% target and the Bank’s rate-setting monetary policy committee (MPC) had to be alert to the threat that previous increases in the cost of food and energy would have knock-on effects on prices and wages. “Food prices tend to be very salient to consumers and closely linked to inflation expectations, so the evolution of food prices will matter for wage growth looking ahead,” Bailey said. The governor said: “Monetary policy is currently restrictive in the sense that, if we maintain this stance for long enough, we will squeeze inflation out of the system. That is what we will do. This also means being on watch for further signs of inflation persistence that may require interest rates to rise again. “How long a restrictive stance will be needed will ultimately depend on what the incoming data tell us about the outlook for overall consumer price inflation over the medium term. The MPC’s latest projections indicate that monetary policy is likely to need to be restrictive for quite some time yet.” The conflict in the Middle East had added upside risks to energy prices and consequently to the cost of food production, Bailey said. Edited November 21, 2023 by fellow Quote Link to comment Share on other sites More sharing options...
stuckmojo Posted November 21, 2023 Share Posted November 21, 2023 He's just managing GBP forex Quote Link to comment Share on other sites More sharing options...
Locke Posted November 21, 2023 Share Posted November 21, 2023 Don't believe them on the way up, don't believe them on the way down. They'll just follow the Fed anyway Quote Link to comment Share on other sites More sharing options...
Timm Posted November 21, 2023 Share Posted November 21, 2023 The job of BOE guvner seems to be mainly talking tough and looking stern. They should get Vinny Jones to do it. Quote Link to comment Share on other sites More sharing options...
BorrowToLeech Posted November 21, 2023 Share Posted November 21, 2023 Rates would have to go high before they can stay high. Quote Link to comment Share on other sites More sharing options...
Huggy Posted November 21, 2023 Share Posted November 21, 2023 Jerome has spoken! I agree they are not high now. Sub-1% is not 'normal' either. Quote Link to comment Share on other sites More sharing options...
Wurzel Of Highbridge Posted November 21, 2023 Share Posted November 21, 2023 They couldn't predict inflation on the way up, so they won't be able to on the way down either. Quote Link to comment Share on other sites More sharing options...
frederico Posted November 21, 2023 Share Posted November 21, 2023 I’ll take that, good news, won’t be long until someone influential says rates are going to drop though. Quote Link to comment Share on other sites More sharing options...
Maghull Mike Posted November 21, 2023 Share Posted November 21, 2023 YES! Quote Link to comment Share on other sites More sharing options...
scottbeard Posted November 21, 2023 Share Posted November 21, 2023 Whilst the BoE always talk a more hawkish game than they play, it seems very clear that @Stewy's idea that we are now less than 30 days from a rate cut is madness, and that my previous thought that the next movement will more likely be up not down is still very possible. Quote Link to comment Share on other sites More sharing options...
Stewy Posted November 21, 2023 Share Posted November 21, 2023 They're too late. Quote Link to comment Share on other sites More sharing options...
Casual-observer Posted November 21, 2023 Share Posted November 21, 2023 3 minutes ago, Stewy said: They're too late. What for? Quote Link to comment Share on other sites More sharing options...
scottbeard Posted November 21, 2023 Share Posted November 21, 2023 26 minutes ago, Stewy said: They're too late. No, you're too early. Come back in the summer and then we might see some. If they cut rates now inflation will just take off again. Quote Link to comment Share on other sites More sharing options...
Casual-observer Posted November 21, 2023 Share Posted November 21, 2023 3 hours ago, Timm said: The job of BOE guvner seems to be mainly talking tough and looking stern. They should get Vinny Jones to do it. Desperation for months not to cause a panic. Both the media and the BOE spinning and spinning (hoping and hoping) that rate rises would be a temporary measure. I've got to say it did work although I think for the masses its really starting to wear thin now. Two colleagues in my circle are really starting to get nervous about the prospect of finding an extra £1000 a month in the next 14-18 months. Quote Link to comment Share on other sites More sharing options...
fellow Posted November 21, 2023 Author Share Posted November 21, 2023 Tomorrow's budget is looking quite inflationary. Rishi seems to think halving inflation is job done but in reality the BOE need to halve inflation again. Quote Link to comment Share on other sites More sharing options...
MerchantNavy Posted November 21, 2023 Share Posted November 21, 2023 1 hour ago, Casual-observer said: Desperation for months not to cause a panic. Both the media and the BOE spinning and spinning (hoping and hoping) that rate rises would be a temporary measure. I've got to say it did work although I think for the masses its really starting to wear thin now. Two colleagues in my circle are really starting to get nervous about the prospect of finding an extra £1000 a month in the next 14-18 months. 1 hour ago, scottbeard said: No, you're too early. Come back in the summer and then we might see some. If they cut rates now inflation will just take off again. Now is the time for a 10 year fix. Quote Link to comment Share on other sites More sharing options...
cdd Posted November 21, 2023 Share Posted November 21, 2023 2 hours ago, Casual-observer said: What for? They are too late to cut for Stewys prediction to come true. It's all the fault of the BOE that Stewy was wrong, not his fault. Quote Link to comment Share on other sites More sharing options...
morty Posted November 21, 2023 Share Posted November 21, 2023 I got an email from my energy provider that prices are going up January. Is that inflationary or will it be creatively hidden away lol. Quote Link to comment Share on other sites More sharing options...
Biggus Posted November 21, 2023 Share Posted November 21, 2023 This is a good sign. What they have been doing for twenty years hasn't worked so they are going to try something else. Finally. Quote Link to comment Share on other sites More sharing options...
Unmoderated Posted November 21, 2023 Share Posted November 21, 2023 18 minutes ago, morty said: I got an email from my energy provider that prices are going up January. Is that inflationary or will it be creatively hidden away lol. Mine's dropping by 35% in December. Not sure who you're with but might want to switch? Is it prices going up or your standing order going up being you're using more than anticipated? Quote Link to comment Share on other sites More sharing options...
morty Posted November 21, 2023 Share Posted November 21, 2023 1 hour ago, Unmoderated said: Mine's dropping by 35% in December. Not sure who you're with but might want to switch? Is it prices going up or your standing order going up being you're using more than anticipated? I thought I would stay on a variable tariff (to my detriment I guess) because of all this talk about lowering rates and possibly lowering energy prices. Now I’m starting to think a rate cut could weaken sterling and energy prices might go up. Now I’m starting to think I’ve got no idea, flipping randomonics. Quote Link to comment Share on other sites More sharing options...
Stewy Posted November 21, 2023 Share Posted November 21, 2023 2 hours ago, cdd said: They are too late to cut for Stewys prediction to come true. It's all the fault of the BOE that Stewy was wrong, not his fault. They're not looking ahead. Fools. 🙄 Quote Link to comment Share on other sites More sharing options...
Unmoderated Posted November 21, 2023 Share Posted November 21, 2023 14 minutes ago, morty said: I thought I would stay on a variable tariff (to my detriment I guess) because of all this talk about lowering rates and possibly lowering energy prices. Now I’m starting to think a rate cut could weaken sterling and energy prices might go up. Now I’m starting to think I’ve got no idea, flipping randomonics. GBP up nicely today! Who knows, nobody can predict the future but energy costs are lower year over year think? That's the biggest contributor to the fall in CPI last month. Quote Link to comment Share on other sites More sharing options...
Casual-observer Posted November 21, 2023 Share Posted November 21, 2023 (edited) 8 minutes ago, Stewy said: They're not looking ahead. Fools. 🙄 Arguably they are when they're making reference to further inflation shocks, one being the fallout to a Ukraine war not going in the wests favour. There's more to an economy than salvaging uneven house prices Edited November 21, 2023 by Casual-observer Quote Link to comment Share on other sites More sharing options...
Data Dave Posted November 21, 2023 Share Posted November 21, 2023 ‘High’ bank rate will be transitory 😝 Quote Link to comment Share on other sites More sharing options...
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